01740cam a22002417 4500001000600000003000500006005001700011008004100028100002100069245009300090260006600183490004100249500002000290520081000310530006101120538007201181538003601253700001801289710004201307830007601349856003701425856003601462w5764NBER20150802173721.0150802s1996 mau||||fs|||| 000 0 eng d1 aBernanke, Ben S.10aWhat Does the Bundesbank Target?h[electronic resource] /cBen S. Bernanke, Ilian Mihov. aCambridge, Mass.bNational Bureau of Economic Researchc1996.1 aNBER working paper seriesvno. w5764 aSeptember 1996.3 aAlthough its primary ultimate objective is price stability, the Bundesbank has drawn a distinction between its money-focus strategy and the inflation targeting approach recently adopted by a number of central banks. We show that, holding constant the current forecast of inflation, German monetary policy responds very little to changes in forecasted money growth; we conclude that the Bundesbank is much better described as an inflation targeter than as a money targeter. An additional contribution of the paper is to apply the structural VAR methods of Bernanke and Mihov (1995) to determine the optimal indicator of German monetary policy: We find that the Lombard rate has historically been a good policy indicator, although the use of the call rate as an indicator cannot be statistically rejected. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.1 aMihov, Ilian.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w5764.4 uhttp://www.nber.org/papers/w576441uhttp://dx.doi.org/10.3386/w5764